Today’s move, which pushed the two-day gain to 11%, was aided by Encana moving to trim some natural-gas output and more signs that some utilities are switching from coal to cheaper gas.

Encana is cutting back natural gas production by 600 MMcf/d in 2012, joining a bevy of producers who say they can’t cope with rock-bottom prices.

“It is abundantly clear that a continued reduction of drilling activity will be required to restore market balance,” says Encana CEO Randy Eresman, adding that prices have fallen below the cost to produce in some places.

Encana, the second largest gas producer after Exxon Mobil, will still produce 3.1 Bcf in 2012. ConocoPhillips and Chesapeake also said last month they’d cut gas production this year.

Natural gas prices have been able to bounce over the last few weeks. Many, though, doubt this rally can hold, given the 42% surplus in natural-gas storage compared to a year ago as well as forecasts for a warm March in most of the U.S.

Comments (5 of 5)

Our US government all these past 5 years, have been pushing "taxpayer subsidized"-"fruitless" Wind, Solar, Ethanol, and Electric when all along this nation has been sitting on a treasure chest full of golden energy,-Natural Gas.
This proves a simple point: Government does not have an economic clue, and should stay away from free market economics, with subsidies using our tax payers' money.All these wind mills will end up as scrap steel, electric and "cornysqueezin" cars,will go the way of the dinosaur, and solar will cost more to produce than what we ever get out of it. Energy Is Private Sector Economics, never public sector economics.

11:04 am February 21, 2012

THETRUTH2U wrote :

NATURAL GAS INFRASTRUCTURE, is lagging supply, Supply of Nat.Gas, is way over the Demand for Nat.Gas.-at this juncture.The Nat.Gas Infrastructure is just now, getting installed and just now, starting to be put in place.....As soon as the Shell, Exxon,Chevron,and Phillips stations allow for Nat.Gas to be installed at all their gas stations, and the car/truck companies convert to Nat.Gas engines, then this country will roll into self sufficient energy. We as a nation are "just now getting started" with Nat.Gas infrastructure. All the Nat Gas discoveries have been a boom, but the boom will have fits and starts depending on market conditions for that Gas.............it will happen, but I believe we are about 5+ years away from Demand catching up with supply.

4:41 pm February 17, 2012

madmilker wrote :

Poor Indian farmers in India on Bamboo Threader Pumps pumping water to earn one (1) Carbon Credit per year....the turnips on Jenkins Hill in Washington D. C. beating their heads together to come up with another way to tax the he!! out of the American taxpayers with a so-call Carbon Tax Bill......fifteen cargo ships polluting as much as 760 million automobiles.....Wal*Mart putting less than 5% foreign in all their stores in China and shoving China Made down the throats of everyone else......and all this time natural gas is selling at $0.79 cents a gallon while gasoline is back up to $3.50.

Poor people couldn't have done this because they understand the difference between "sense" and "cents" and just how common both are when they attached to a body of character and not a stiff shirt self-centered "my sh!! don't stink" asinine career politician that couldn't pour p out of a boot with the instructions written on the heel and being one sandwich short of a picnic.

4:29 pm February 17, 2012

Anonymous wrote :

Why are we not seeing Natural gas running cars all over the USA. Are you asleep at the wheel? It is cleaner, cheaper and just smart. Or maybe you came from the number 11 ranking educational systemin the world, USA. That would explain it.

3:27 pm February 17, 2012

intrast@aol.com wrote :

Pricing signals are only transformational. Any reduced production is directly associated with restraints already in place by contract. It's just sounds good to say you are cutting production when the memo already told you you have to. Reductions in storage week to week are still less than average. Good hunting.

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